accountable primary care: a critical investment

The clinical value of the relationship between primary care physicians and their patients should not be underestimated. A primary care physician's current and potential role in ensuring patient-centered care is becoming increasingly clear. Most patients think of their primary care physicians first for preventive services and then for treatment of acute illnesses and minor injuries, management of chronic disease, and assistance in coping with the aging process. Primary care physicians are often the ones to recommend additional tests or to identify the need for further diagnostic or therapeutic services from subspecialty physicians and hospital inpatient, outpatient, and ancillary departments.

For these reasons and more, a "known" primary care physician may just be a hospital's most powerful partner in terms of attaining high-quality care, high levels of patient satisfaction, and cost-effectiveness.

Making the Most of the Relationship

Strategically, primary care physicians are an increasingly essential investment for hospitals and their affiliated subspecialty physicians, who rely wholly or partially on patient referrals. The primary care providers capture and retain market share (e.g., covered lives or a defined population) for other members of the healthcare delivery system. They influence patients' decisions regarding subspecialty services, ancillary services, and acute care services.

During the late 1980s and 1990s, as capitation shifted financial risk to providers, primary care physicians often were referred to as "gatekeepers," restricting access to subspecialty care to control utilization. Some organizations, however, understood the essential role of primary care physicians in expanding access to appropriate care.

As the number of active patients increased, staff were added to support primary care physicians in managing their care-an earlier version of a patient-centered medical home (PCMH). Multiple primary care physicians cooperated to offer extended and weekend hours in key locations to provide increased access to their patients rather than sending them to the emergency department. Some primary care physicians narrowed their subspecialty referrals to include only subspecialty physicians who demonstrated high-quality clinical care and service and appropriate utilization.

As hospital utilization decreased, wise hospital executives expanded their market share by investing in additional primary care physicians and practices in targeted geographies.

Today, most hospital executives understand the connection between affiliated primary care physicians and hospital/subspecialty market share as well as the anticipated role of primary care physicians in accountable care organizations (ACOs).

Hospital CFOs can do much more, however, to ensure the success of their organizations' primary care strategy by asking questions in four key areas.

Strategic investment. Have we adequately capitalized a geographic strategy for placement of primary care physicians to capture market share (women and their families) in neighborhoods associated with our target markets?

Primary care practices are a critical strategic investment and should be included in every capital budget. Depending on the local and regional market share strategy, hospitals should be prepared to recruit primary care physicians, help independent practices add partners, acquire established primary care practices, and start new primary care locations in untapped neighborhoods.

CFOs also should encourage the development of a specific primary care market share strategy as the basis for every medical staff development plan. Given current industry trends, market share objectives should be reflected in terms of active patients captured in affiliated primary care practices as opposed to throughput measures like admissions.

Referral path management. Do we have the clinical and service quality necessary to attract (rather than mandate) appropriate referrals to our affiliated subspecialists and our hospital departments?

A strategic investment in primary care practices won't pay off if referrals for ancillary services or subspecialty services or hospital admissions go to a competing integrated delivery system (IDS). The traditional medical staff model leaves referral path management to chance. Instead, improved clinical quality, continuity of care, communication, risk management, and capital generation require active management of referral relationships. Hospital leaders should ensure ease of access for primary care providers referring to affiliated subspecialists and ease of use for hospital inpatient, outpatient, and ancillary services.

Asking for referrals, encouraging service-quality feedback, and monitoring referrals are all increasingly critical activities as hospitals and other providers prepare to shoulder more risk in ACOs and other integrated settings.

Volume and value. Do we understand the critical role of both volume and value in ensuring access to patients who need medical services?

In recent years, significant buzz has focused on replacing volume with value-value that is currently being largely defined by payers that can reward or punish through payment for services. Physicians and executives realize, of course, that volume is essential to access. A primary care physician doing a great job in treating 15 patients a day is not a sustainable model from either access or financial perspectives. Volume also is essential to managing population risk because larger volumes spread catastrophic cases of illness or injury across a larger patient population.

Regardless of the payment model, volume will remain essential to the success of IDSs and their component parts, especially primary care practices, which have razor-thin margins.

To survive, primary care physicians will need to achieve both high volumes and demonstrated value. Independent and employed physicians will have to become increasingly productive while maintaining the level of care that built their reputations.

As practices become busier, more support staff will be needed to ensure that physicians do what only physicians can do and delegate everything else. The increased emphasis on volume and value will require a change in thought process for many primary care practices, which are traditionally understaffed. Processes and technology should enhance physician and support staff productivity rather than drag down productivity levels. Consistent with the PCMH model, physicians, midlevel providers, and their support staff will increasingly function as teams in providing comprehensive clinical care and great service. Physicians will spend more time touching patients rather than keyboards.

As hospitals employ additional primary care physicians, CFOs need to ensure that employed physician compensation models reward both volume and value. Traditionally, employed physicians have tended not to be as productive as their independent counterparts. It is therefore critical that compensation models encourage employed physicians to achieve private practice levels of productivity and quality.

Some of the most innovative primary care compensation arrangements tie reward for achieving clinical and service quality metrics to production compensation, recognizing that a physician who provides high-quality care while being highly productive delivers the greatest possible value to both the IDS and the patients it serves.

Multiple plugs. Does our IDS have multiple "plugs" or ways that physicians can participate, based on their needs, wants, and priorities?

Physician recruiters today know that attracting primary care physicians and midlevel providers from training programs usually requires that hospitals offer an employment option.

Many established independent primary care physicians (and subspecialists) also are considering hospital employment as they contemplate their futures. At the same time, most medical staffs will be dependent on the success of both independent and employed physicians for the next several years.

IDSs that offer multiple ways to connect with physicians are more likely to continue to engage independent physicians as their needs, wants, and priorities change over time. These options range from the least integrated medical staff membership, co-management arrangements (service line partnerships), joint ventures (capital partnerships), and professional services arrangements (service provider partnerships) to the most structurally integrated employment arrangements.

A Strategy for Success Under Reform

Primary care physicians will continue to be the foundation of medical care for communities, regardless of changes in the healthcare industry. They drive coordinated, patient-centered care across the continuum of medical services, and their referrals generate revenue and capital for the entire community healthcare system.

Although IDSs will work cooperatively to define and achieve population health objectives, most of the tactics will emanate from successful PCMHs under the purview of accountable primary care physicians. The hospital CFO's role should be to ensure that adequate capital is invested to build and maintain the organization's primary care market share strategy for a secure future. *

AT A GLANCE

> Primary care physicians today can be expected to capture between 2,000 and 5,000 active patients who consider that physician to be "my physician."

> The geographic location of primary care physicians affects the payer mix of the hospital and its affiliated subspecialists.

> Hospital and health system CFOs would be wise to advocate investment in primary care physicians to secure market share. They should also develop compensation plans with a value-volume balance and establish ways to actively manage referrals.

The Role of Women and Primary Care

While primary care physicians provide the glue that establishes the bond between a hospital and its patients, it bears emphasizing that this bond depends largely on the healthcare decision-making of women. Although the traditional roles have changed, women still make the majority of healthcare provider decisions for their families. As long as the female head of household enjoys reasonable access and a high-quality experience for herself and her family, it is probable that she will remain with the primary care physician she first selects, and this pattern is likely to persist regardless of healthcare reform or other industry trends.

Marc D. Halley, MBA, is president and CEO, The Halley Consulting Group, Inc., Dublin, Ohio ([email protected]).

Peter Anderson, MD, is president and CEO of Team Care Medicine LLC, Yorktown, Va. (panderson@teamcaremedicine).